UK wages rose at the fastest pace in a decade in the three months to October, suggesting that real pay growth is turning sustainable and contribute to economic growth if a "no-deal" Brexit is avoided.
Average wages including bonuses rose 3.3 percent year-on-year, which was the biggest increase since the May to July period of 2008, the Office for National Statistics said on Tuesday. Economists had forecast a 3 percent increase.
Excluding bonuses, average pay increased 3.3 percent, which was the fastest rise since September to November 2008.
Whether the latest improvement in pay growth will sustained depends on how Brexit turns out, Capital Economics said.
"If there is a deal, we expect real spending growth to pick up from a likely 1.6 percent this year, to around 2.0 percent by 2019, significantly higher than the consensus expectation of 1.4 percent," Capital Economics economist Ruth Gregory said.
"In contrast, if there were a "no deal" Brexit, we estimate a hit of between 1 and 3ppts to consumer spending growth next year, depending on the scenario."
Employment grew by 79,000 from the three months to July to a record 32.48 million, while economists were looking for an increase of just 25,000.
The employment rate was an all-time high of 75.7 percent, which ONS said was the joint-highest estimate since comparable estimates began in 1971.
The number of unemployed rose by 20,000 to 1.38 million in the three months to October. The ILO jobless rate was steady at 4.1 percent as expected.
The material has been provided by InstaForex Company -
www.instaforex.com